Tottenham and Agnew, JJ.
1. The question laid before us for decision by the appellant's pleader is, whether the defendants in this suit were entitled under Section Ill of the Civil Procedure Code to set-off against the plaintiff's claim certain amounts in respect of which they alleged a claim against him, such amounts being, at the time when the written statement was filed, unascertained. The suit was one for contribution in respect of a decree obtained jointly against the plaintiff and defendants, but which was liquidated by the plaintiff alone. The decree was in respect of arrears of rent of an ijara held jointly by the plaintiff and defendants. The defendants pleaded that, although the plaintiff had paid off the whole of the decree in question, still he was not entitled to recover any portion of the decretal amount from them, because they had paid up to the zamindar the whole of the ijaia rents for other years, and had been out of pocket by so doing, the collections having fallen short of the rents payable to the zamindar, and the plaintiff having failed to contribute his share of the sum so paid. It was also alleged that the plaintiff himself held in nij jote a portion of the ijara land, and that in respect of such land he was liable to pay rent to the defendants. And there was a further allegation that in the year 1286, being the last year of the ijata, the plaintiff had himself realised a portion of the rent from the ryots, but had not paid over to the defendants their share of such rent.
2. The first Court originally decreed the suit, holding that Section 111 did not apply to the case, and that, therefore, if the defendants had any counter-claim, they must establish it by a separate regular suit. This decision was set aside by the lower Appellate Court, and ultimately, an account being gone into, the Courts below have concurred in holding that the amount claimed by the defendants from the plaintiff is in excess of that which the plaintiff claims from the defendants; and the suit has accordingly been dismissed.
3. It appears to us quite clear that so far as Section 111 of the Code of Civil Procedure is concerned, the original judgment of the first Court was correct in law. The counter-claim of the defendants did not fulfil any of the conditions set out in Section 111, as entitling them to plead the set-off. But the pleader for the respondent, in the course of his argument, has shown us decisions of the High Courts of Madras and Bombay, in which it was held that Section 111 of the Civil Procedure Code does not take away from parties any right to set-off whether legal or equitable, Which they would have had independently of the Code. The cases are Clark v. Ruthnavaloo Chetti 2 Mad. H.C. 296 and Kishorchand Champalal v. Madhowji Visram I.L.R. 4 Bom. 407. It was observed by the Madras High Court that 'the right of set-off will be found to exist not only in cases of material debts and credits, but also where cross demands arise out of the same transaction, or are so connected in their nature and circumstances as to make it inequitable that the plaintiff should recover and the defendant be driven to a cross suit.' We think that we may properly adopt the principle followed in these two decisions, and affirm the ruling of the lower Appellate Court so far as the defendants' demand can be said to arise out of the same transaction as that of the plaintiff. We think, therefore, that the decree, satisfied by the plaintiff, having been for arrears of rent of the same ijara to which the defendants' demand relates, the defendants' counter-claim in respect of the ijara rents paid by them to the zamindar without the assistance of the plaintiff should be taken into account in determining the suit. But we think that the claim which the defendants advanced for rent from the plaintiff as for land cultivated and held by him exclusively within the ijara should not be entertained. That, we think, is a separate matter from the rents payable to the zamindar.
4. Further, the Court in which this suit was tried had no jurisdiction to entertain any claim for rent by the defendants against the plaintiff. In that part of the country in which the suit was brought, Act X of 1859 is still in force, and suits for rent are tried in Revenue and not in Civil Courts. Further, it appears on the face of the record that, as regards a portion of the claim for rent, the defendants' demand was barred by limitation at the time when their written statement in this suit was filed. It remains, therefore, to be decided whether the amount of rent paid to the zemindar by the defendants without the help of the plaintiff, and for which the plaintiff was liable jointly with themselves, amounts to such a sum as will cancel the plaintiff's claim in this suit. If the amount recoverable under this head by the defendants is equal to, or in excess of, the plaintiff's claim against them, the suit will properly be dismissed. If, on the other hand, this amount is less than the plaintiff's admitted claim against the defendants, he will obtain a decree for the excess. The first Court simply says that the claim of the defendants under the first two heads, that is, the ijara rent and the rent payable by the plaintiff for his nij land, together exceed the amount of the plaintiff's claim. The District Judge must now determine whether the amount claimed by the defendants under the first head alone is sufficient to satisfy the plaintiff's claim. The case must go back to the lower Appellate Court for that purpose.
5. The costs of this appeal will be apportioned in proportion to the ultimate result.